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European Central Bank President Jean-Claude Trichet is urging policymakers to maintain fiscal responsibility when developing economic rescues. Trichet warned that fiscal indiscipline could further hinder confidence in the financial system and increase investors' nervousness about the funding needs of governments. He said EU nations should continue to adhere to the "stability and growth pact". "We would destroy confidence if we blew up the stability and growth pact," Trichet said.

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The alleged $50 billion "pyramid scheme" by investment manager Bernard Madoff has hit some of the largest names in global finance, including HSBC, Santander and BNP Paribas. HSBC has about $1 billion worth of exposure to Bernard L. Madoff Investment Securities, sources said, and France's BNP Paribas said its maximum potential loss is roughly €350 million. Spain's Santander said its investment fund Optimal had exposure of €2.33 billion to the collapsed venture.

Islamic financial products and infrastructure are being developed from scratch for the first time. In January, the first Islamic exchange-traded fund was launched. Malaysia's Syariah Advisory Council gave its approval for an Islamic commodity exchange as well as for borrowing and lending of securities. These and other developments indicate that the Islamic financial market is evolving and maturing in Malaysia and in the Middle East.

European Central Bank President Jean-Claude Trichet is urging policymakers to maintain fiscal responsibility when developing economic rescues. Trichet warned that fiscal indiscipline could further hinder confidence in the financial system and increase investors' nervousness about the funding needs of governments. He said EU nations should continue to adhere to the "stability and growth pact." "We would destroy confidence if we blew up the stability and growth pact," Trichet said.

A ruling by the Brussels Court of Appeal freezes transfer of the government's majority stake in Fortis to BNP Paribas, but the Belgian government said it plans to go through with the €14.5 billion sale. Government officials will review their options, including procedural challenges and possibly an appeal to the Supreme Court. The government is still free to transfer a 49.9% holding in Fortis to BNP Paribas.

In November and December, sales of company bonds in Europe soared to beat end-of-year issuance in the US for the first time. Dealogic reported that nonfinancial companies in Europe sold more than $57 billion in the final two months of the year. Their American counterparts sold $41.4 billion, while Asian issuance reached $23.7 billion.